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The Lucky Country & getting the structure right

by The Wrinkle | October 8, 2010

Here’s an interesting fact to finish the week on, a study amongst students at Cornell University by communication expert Jeff Hancock indicated:

  • 14% of people lied in emails
  • 27% lied in face to face conversations, and
  • 37% lied in telephone calls.

So if you want a better chance of the truth, send an email, people are less likely to lie in emails as there is a written record of what they have said.

Looking back through legal history this has obviously been understood at some intrinsic level, as property contracts must be in writing to be binding, there is no allowance for verbal contracts in property law.

Last week we talked about generation gaps and expectation gaps and whether there are any answers to bridging these gaps to alleviate the social unrest that appears to be just over the horizon.

For what it’s worth, here’s the Wrinkle’s best shot. Before I start you have to say that Australia has the structure pretty much right. The lucky country has one big major advantage, a low population density. Contrary to popular belief, mineral wealth in all its guises is (or more correctly) has been spread around the world fairly equally.

There are still companies looking to mine gold in Scotland, however if it was you would you rather go through environmental hoops in Scotland or the Australian Outback? Still it could also be argued that resource exploitation comes and goes, for example in 40 years time it is highly likely that we will be far less dependent on oil.

Economically you could say Australia has entered a “Golden Period” and this has allowed for a transition to a more effective government and economic structure with less pain. Putting aside the obvious inefficiency of state and federal governments in a country with less population than some US states, let’s look at what’s good structurally across the generational divide.

Baby bonus and maternity leave – as we’ve indicated, population self-sufficiency and the maintenance of a younger demographic coming through to support the older generation is important. Internal population growth needs to be encouraged.

Education – fair access to a good education is arguably one of the greatest gifts a person can receive, it effectively gives you the ability to maximise your earning potential and employment opportunities. It’s the best social and cultural equaliser by far.

Universal minimum wage, welfare, and unemployment benefits – giving the less advantaged or those temporarily down on their luck a means to at least have a living beyond the poverty line helps hold the community and social fabric together.

A fair and broad tax base – GST at the rate of 10% to 15% is the most effective way to use tax to avoid excessive tax sheltering as it is hard to avoid and universal. Frankly the rest of the tax structure is largely social tinkering around the edges to build what is considered a fair norm amongst first world countries. GST is a very effective backstop to ensure there isn’t excessive seepage or manipulation of the system.

Effective government – some would argue certainty is important, the Wrinkle would hold out for transparency above all as this encourages honesty and effective and efficient delivery. Which is probably a promo for “free speech” and good civil rights in another guise.

Respect for the elderly, the right to work, and retirement benefits – given the population issues facing us, we should be encouraging people to work for as long as they want or are able. Frankly an arbitrary retirement age should only really be used for determining pension benefits. State pensions need to be tied to need and life expectancy, the whole French one third, one third; one third concept mentioned last week is simply never going to be sustainable economically with the current healthy state of people in their sixties. The Wrinkle would suggest that there is almost a case for setting the retirement age as life expectancy less 10 or 15 years. If you were born in Australia recently the average life expectancy for a male is 79 years and for a woman 83 years.

Compulsory Superannuation – this needs to again be in the range of 10% to 15% to give people the ability to retire with a level of income similar to that during their working life. As for the politicians in this country who “creamed” a 17.5% rate plus a raft of other benefits, taxpayers will be paying for this largesse for decades to come.

As in all things at the end of the day it all comes down to balance, and when it comes to the lucky country the Wrinkle thinks the balance is about right or heading there.

Have a good week.

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